SECURITIES AND EXCHANGE COMMISSION

(Release No. 34-76354; File No. SR-CBOE-2015-099)

November 4, 2015

Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing

of a Proposed Rule Change to List and Trade Options that Overlie a Reduced Value of the FTSE

China 50 Index

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),1 and Rule

19b-4 thereunder,2 notice is hereby given that on October 30, 2015, Chicago Board Options

Exchange, Incorporated (the “Exchange” or “CBOE”) filed with the Securities and Exchange

Commission (the “Commission”) the proposed rule change as described in Items I, II, and III

below, which Items have been prepared by the Exchange. The Commission is publishing this

notice to solicit comments on the proposed rule change from interested persons.

I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule

Change

The Exchange is proposing to amend its rules to list and trade options that overlie a

reduced value of the FTSE China 50 Index.

The text of the proposed rule change is available on the Exchange’s website

(http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange’s Office

of the Secretary, and at the Commission’s Public Reference Room.

II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the

Proposed Rule Change

In its filing with the Commission, the Exchange included statements concerning the

purpose of and basis for the proposed rule change and discussed any comments it received on the

proposed rule change. The text of these statements may be examined at the places specified in

1 15 U.S.C. 78s(b)(1).

2 17 CFR 240.19b-4.

2

Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of

the most significant aspects of such statements.

A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis

for, the Proposed Rule Change

1. Purpose

The purpose of this proposed rule change is to permit the Exchange to list and trade

options that overlie a reduced value of the FTSE China 50 Index (“China 50 options”). China 50

options would be A.M., cash-settled contracts with European-style exercise.

FTSE China 50 Index Design, Methodology and Dissemination

The FTSE China 50 Index is a free float-adjusted market capitalization index that is

designed to measure the performance of 50 of the largest and most liquid Chinese stocks (H

Shares3, Red Chips

4 and P Chips

5) listed and trading on the Stock Exchange of Hong Kong

(SEHK).6

The FTSE China 50 Index was launched on April 19, 2001 and is calculated by FTSE

International Limited (“FTSE”), which is a provider of investment support tools. The FTSE

3 H Shares are securities of companies incorporated in the People's Republic of China

(PRC) and listed on SEHK. They can only be traded by Chinese investors under the

Qualified Domestic Institutional Investors Scheme (QDII). There are no restrictions for

international investors.

4 Red Chip companies are incorporated outside the PRC and traded on SEHK. A Red Chip

company has at least 30 percent of its shares in aggregate held directly or indirectly by

mainland state entities, and at least 50 percent of its revenue or assets derived from

mainland China.

5 P Chip companies are incorporated outside the PRC that trade on SEHK. A P Chip is a

company that is controlled by Mainland China individuals, with the establishment and

origin of the company in Mainland China and at least 50 percent of its revenue or assets

derived from mainland China.

6 See FTSE China 50 Index fact sheet (dated August 31, 2015) located at:

http://www.ftse.com/Analytics/FactSheets/temp/a5b0d638-068e-41d9-b169-

be9838d8227a.pdf.

3

China 50 Index is calculated and published on a real-time basis in Hong Kong dollars during

Hong Kong trading hours. The methodology used to calculate the FTSE China 50 Index is

similar to the methodology used to calculate the value of other benchmark market-capitalization

weighted indexes. Specifically, the FTSE China 50 Index is governed by the FTSE Ground

Rules for the FTSE China 50 Index.7 The level of the FTSE China 50 Index reflects the free

float-adjusted market value of the component stocks relative to a particular base date and is

computed by dividing the total market value of the companies in the FTSE China 50 Index by

the index divisor.

The FTSE China 50 Index is monitored and maintained by FTSE. Adjustments to the

FTSE China 50 Index could be made on a daily basis with respect to corporate events and

dividends. FTSE reviews the FTSE China 50 Index quarterly (March, June, September and

December) according to rules for inserting and deleting companies that “are designed to provide

stability in the selection of constituents of the FTSE China 50 Index while ensuring that the

[FTSE China 50] Index continues to be representative of the market by including or excluding

those companies which have risen or fallen significantly.”8

Real-time data is distributed at least every 15 seconds while the index is being calculated

using FTSE’s real-time calculation engine to Bloomberg L.P. (“Bloomberg”), Thomson Reuters

(“Reuters”) and other major vendors. End of day data is distributed daily to clients through

FTSE as well as through major quotation vendors, including Bloomberg and Reuters.

The Exchange proposes to base trading in options on a fraction of the full size FTSE

7 Summary and comprehensive information about the FTSE China 50 Index methodology

may be reviewed at:

http://www.ftse.com/products/downloads/FTSE_China_50_Index__English_.pdf?154).

8 See id.

4

China 50 Index. In particular, the Exchange proposes to list FTSE China 50 options that are

based on one one-hundredth of the value of the FTSE China 50 Index. The Exchange believes

that listing options on the reduced value of the index will attract a greater source of customer

business than if options were based on the full value of the FTSE China 50 Index. The Exchange

further believes that listing options on a reduced value of the FTSE China 50 Index will provide

an opportunity for investors to hedge, or speculate on, the market risk associated with the stocks

comprising the FTSE China 50 Index. Additionally, by reducing the value of the FTSE China 50

Index, investors will be able to use this trading vehicle while extending a smaller outlay of

capital. The Exchange believes this should attract additional investors, and, in turn, create a more

active and liquid trading environment.

Initial and Maintenance Listing Criteria

The FTSE China 50 Index meets the definition of a broad-based index as set forth in Rule

24.1(i)(1).9 In addition, the Exchange proposes to create specific initial and maintenance listing

criteria for options on the reduced value of the FTSE China 50 Index. Specifically, the Exchange

proposes to add new Interpretation and Policy .02(a) to Rule 24.2, Designation of the Index, to

provide that the Exchange may trade China 50 options if each of the following conditions is

satisfied: (1) The index is broad-based, as defined in Rule 24.1(i)(1); (2) Options on the index

are designated as A.M.-settled index options; (3) The index is capitalization-weighted, price-

weighted, modified capitalization-weighted or equal dollar-weighted; (4) The index consists of

45 or more component securities; (5) Each of the component securities of the index will have a

market capitalization of greater than $100 million; (6) No single component security accounts for

9 Rule 24.1(i)(1) defines a broad-based index to mean an index designed to be

representative of a stock market as a whole or of a range of companies in unrelated

industries.

5

more than fifteen percent (15%) of the weight of the index, and the five highest weighted

component securities in the index do not, in the aggregate, account for more than fifty percent

(50%) of the weight of the index; (7) Non-U.S. component securities (stocks or ADRs) that are

not subject to comprehensive surveillance agreements do not, in the aggregate, represent more

than twenty percent (20%) of the weight of the Index; (8) The Exchange may continue to trade

China 50 options after trading in all component securities has closed for the day and the index

level is no longer widely disseminated at least once every fifteen (15) seconds by one or more

major market data vendors, provided that China 50 futures contracts are trading and prices for

those contracts may be used as a proxy for the current index value; (9) The Exchange reasonably

believes it has adequate system capacity to support the trading of options on the index, based on

a calculation of the Exchange’s current Independent System Capacity Advisor (ISCA) allocation

and the number of new messages per second expected to be generated by options on such index;

and (10) The Exchange has written surveillance procedures in place with respect to surveillance

of trading of options on the index.

Additionally, the Exchange proposes to add new Interpretation and Policy .02(b) to Rule

24.2, Designation of the Index, to set forth the following maintenance listing standards for China

50 Options: (1) The conditions set forth in subparagraphs .02(a) (1), (2), (3), (4), (7), (8), (9) and

(10) must continue to be satisfied. The conditions set forth in subparagraphs .02(a)(5) and (6)

must be satisfied only as of the first day of January and July in each year; and (2) The total

number of component securities in the index may not increase or decrease by more than ten

percent (10%) from the number of component securities in the index at the time of its initial

listing. In the event a class of index options listed on the Exchange fails to satisfy the

maintenance listing standards set forth herein, the Exchange shall not open for trading any

6

additional series of options of that class unless the continued listing of that class of index options

has been approved by the Commission under Section 19(b)(2) of the Exchange Act.

The Exchange believes that A.M. settlement is appropriate for China 50 options due to

the nature of the index that encompasses the Chinese market. The components of the FTSE

China 50 Index open with the start of trading on the SEHK at approximately 8:30 p.m. (Chicago

time) (prior day) and close with the end of trading on the SEHK at approximately 3:00 a.m.

(Chicago time) (next day). The closing FTSE China 50 Index level is distributed by FTSE

between approximately 3:00 a.m. and 4:00 a.m. (Chicago time) each trading day. Thus, between

8:30 a.m. and 3:15 p.m. (Chicago time) the FTSE China 50 Index level is a static value that

market participants can access via data vendors.

As a result, there will not be a current FTSE China 50 Index level calculated and

disseminated while China 50 options would be traded.10

However, the E-Mini FTSE China 50

Index future contracts based on the FTSE China 50 Index that trades on CME will be trading

during this time period.11

The Exchange believes that the E-Mini FTSE China 50 Index futures

prices would be a proxy for the current FTSE China 50 Index level. Therefore, the Exchange

believes that China 50 options should be permitted to trade after trading in all component

securities has closed for the day and the index level is no longer widely disseminated at least

once every fifteen (15) seconds by one or more major market data vendors, provided that E-Mini

10

The trading hours for China 50 options are from 8:30 a.m. (Chicago time) to 3:15 p.m.

(Chicago time).

11 The trading hours for E-Mini FTSE China 50 Index Futures are from 5:00 p.m. (Chicago

time) to 4:00 p.m. (Chicago time) the following day, Sunday through Friday. See E-Mini

FTSE China 50 Index Future Contract specifications located at:

http://www.cmegroup.com/education/files/e-mini-ftse-china-50-index-futures.pdf. The

Exchange believes E-Mini FTSE China 50 Index Futures are an appropriate proxy for

China 50 options.

7

FTSE China 50 Index future contracts are trading and prices for those contracts may be used as a

proxy for the current index value.

Because the FTSE China 50 Index is comprised of 50 of the largest and most liquid

Chinese stocks traded on the SEHK, the Exchange believes that the initial listing requirements

are appropriate to trade options on this index. In addition, similar to other broad based indexes,

the Exchange proposes various maintenance requirements, which require continual compliance

and periodic compliance.

Options Trading

Exhibit 3 presents contract specifications for China 50 options.

The contract multiplier for China 50 options would be $100. China 50 options would be

quoted in index points and one point would equal $100. The minimum tick size for series trading

below $3 would be 0.05 ($5.00) and at or above $3 will be 0.10 ($10.00).

Initially, the Exchange would list in-, at- and out-of-the-money strike prices. Additional

series may be opened for trading as the underlying index level moves up or down.12

The minimum

strike price interval for China 50 options series would be 2.5 points if the strike price is less than

200. When the strike price is 200 or above, strike price intervals would be no less than 5 points.13

New series would be permitted to be added up to the fifth business day prior to expiration.14

12

See Rules 24.9(d) and 24.9.04. These rules set forth the criteria for listing additional

series of the same class as the current value of the underlying index moves. Generally,

additional series must be “reasonably related” to the current index value, which means

that strike prices must be within 30% of the current index value. Series exceeding the

30% range may be listed based on demonstrated customer interest.

13 See proposed amendments to Rule 24.9.01(a) adding China 50 options as a class eligible

for 2.5 point minimum strike intervals if the strike price is below 200.

14 See Rule 24.9.01(c).

8

The Exchange would be permitted to list up to twelve near-term expiration months.15

The

Exchange would also be permitted to list up to ten expirations in Long-Term Index Option Series

(“LEAPS”) on the reduced value of the FTSE China 50 index and the index would be eligible for

all other expirations permitted for other broad-based index options, e.g., End of Week/End of

Month Expirations, Short Term Option Series and Quarterly Option Series.16

The trading hours for China 50 options would be from 8:30 a.m. (Chicago time) to 3:15

p.m. (Chicago time).17

Exercise and Settlement

The proposed China 50 options would expire on the third Friday of the expiring month.18

Trading in expiring China 50 options would cease at 3:15 p.m. (Chicago time) one business day

prior (usually a Thursday) to the day on which the exercise-settlement value is calculated

(usually a Friday). When the last trading day/expiration date is moved because of an Exchange

holiday or closure, the last trading day/expiration date for expiring options would be the

immediately preceding business day.

Exercise would result in delivery of cash on the business day following expiration. China

50 options would be A.M.-settled, in that the expiring contract would cease trading on the

15

See proposed amendments to Rule 24.9(a)(2). The Exchange is proposing to allow the

listing of up to twelve expiration months at any one time for China 50 options.

16 See e.g., Rules 24.9(b) (LEAPS), 24.9(e) (End of Week/End of Month Expirations),

24.9(a)(2)(A) (Short Term Option Series) and 24.9(a)(2)(B) (Quarterly Option Series).

See also, proposed Rule 24.9(b)(2)(A)(lxxxvi) (listing LEAPS on the reduced value of

the FTSE China 50 Index).

17 See Rule 24.6.

18 See proposed Rule 24.9(a)(3)(listing the reduced value FTSE China 50 Index as a

European-style index option approved for trading on the Exchange).

9

business day (usually a Thursday) before the expiration date (generally a Friday).19

The exercise

settlement value would be one-hundredth (1/100th) of the official closing value of the FTSE

China 50 Index as reported by FTSE on the last trading day of the expiring contract, which

occurs between approximately 3:00 a.m. and 4:00 a.m. (Chicago time).20

The exercise settlement amount would be equal to the difference between the exercise-

settlement value and the exercise price of the option, multiplied by the contract multiplier ($100).

If the exercise settlement value is not available or the normal settlement procedure cannot

be utilized due to a trading disruption or other unusual circumstance, the settlement value would

be determined in accordance with the rules and bylaws of The Options Clearing Corporation

(“OCC”).21

Position and Exercise Limits

The Exchange proposes to apply the default position limits for broad-based index options

to China 50 options. Specifically, the chart set forth in Rule 24.4(a), Position Limits for Broad-

Based Index Options, provides that the positions limits applicable to “other broad-based indexes”

is 25,000 contracts (standard limit/on the same side of the market) and 15,000 contracts (near-

term limit). Pursuant to Rule 24.5, Exercise Limits, the exercise limits for China 50 options

19

See proposed amendment to Rule 24.1.01 to identify FTSE International Limited as the

Reporting Authority for the FTSE China 50 Index. As the designated Reporting

Authority for the index, the disclaimers set forth in Rule 24.14 (Disclaimers) would apply

to FTSE International Limited.

20 See proposed amendment to Rule 24.9(a)(4) to specify that for China 50 options the

current index value at expiration is based on the closing prices of the underlying

securities on the last trading day. The last day of trading continues to be the business day

preceding the last day of trading in the underlying securities prior to expiration because

the business day preceding the last day of trading in the underlying securities is

(generally) Thursday Chicago time and the last day of trading in the underlying securities

is (generally) Friday Chicago time.

21 See Rule 24.7.

10

would be equivalent to the position limits for China 50 options. All position limit hedge

exemptions would apply.

Margin

The Exchange proposes that China 50 options be margined as “broad-based index”

options, and under CBOE rules, especially, Rule 12.3(c)(5)(A), the margin requirement for a

short put or call shall be 100% of the current market value of the contract plus 15% of the

“product of the current index group value and the applicable index multiplier,” reduced by any

out-of-the-money amount. There would be a minimum margin requirement of 100% of the

current market value of the contract plus: 10% of the aggregate put exercise price amount in the

case of puts, and 10% of the product of the current index group value and the applicable index

multiplier in the case of calls. Additional margin may be required pursuant to Rules 12.3(h) and

12.10 (Margin Required is Minimum).

The Exchange believes that FTSE China 50 Index options are an eligible product for

portfolio margining under CBOE Rule 12.4. Accordingly, the Exchange proposes that FTSE

China 50 Index options be allowed in portfolio margin accounts. In the portfolio margining

construct, a Class Group for the FTSE China 50 Index already exists and it is contained within

the China Indexes Product Group. This Product Group is a non-high capitalization, broad-based

index Product Group. In portfolio margin accounts, the assumed market moves currently utilized

in the China Indexes Product Group (which would not be changing) are -10%/+10%, with a

100% offset of gains and losses between all products in the same Class Group. There is a 90%

offset of gains and losses between Class Groups.22

22

A table detailing the currently existing portfolio margining Product Groups and their

component class groups can be found at

11

Exchange Rules Applicable

Except as modified herein, the rules in Chapters I through XIX, XXIV, XXIVA, and

XXIVB would equally apply to China 50 options. China 50 options would be subject to the

same rules that currently govern other CBOE index options, including sales practice rules23

,

margin requirements24

and trading rules.25

The Exchange hereby designates China 50 options as eligible for trading as Flexible

Exchange Options as provided for in Chapters XXIVA (Flexible Exchange Options) and XXIVB

(FLEX Hybrid Trading System).26

Surveillance and Capacity

The Exchange represents that is has an adequate surveillance program in place for China

50 options and intends to use the same surveillance procedures currently utilized for each of the

Exchange's other index options to monitor trading in China 50 options.

The Exchange is a member of the Intermarket Surveillance Group (“ISG”), which “is

comprised of an international group of exchanges, market centers, and market regulators.”27

The

http://www.optionsclearing.com/components/docs/risk-

management/cpm/cpm_parameters.pdf.

23 See Chapter IX (Doing Business with the Public).

24 See Chapter XII (Margins).

25 See e.g., Chapters IV (Business Conduct), VI (Doing Business on the Exchange Floor),

Chapter VIII (Market-Makers, Trading Crowds and Modified Trading Systems) and

Chapter XXIV (Index Options).

26 See proposed amendments to Rules 24A.7, Position Limits and Reporting Requirements,

and 24B.7, Position Limits and Reporting Requirements, providing that the position

limits for FLEX Index options on the FTSE China 50 Index would be equal to the

position limits for Non-FLEX options on the Index. Per existing Rules 24A.8, Exercise

Limits, and 24B.8, Exercise Limits, the exercise limits for FLEX China 50 options would

be equivalent to the position limits for FLEX China 50 options.

27 See Intermarket Surveillance Group website, available at

https://www.isgportal.org/home.html.

12

purpose of the ISG is to provide a framework for the sharing of information and the coordination

of regulatory efforts among exchanges trading securities and related products to address potential

intermarket manipulations and trading abuses. The ISG plays a crucial role in information

sharing among markets that trade securities, options on securities, security futures products, and

futures and options on broad-based security indexes. A list identifying the current ISG members

is available at: https://www.isgportal.org/home.html.

The Exchange is also an affiliate member of the International Organization of Securities

Commissions (“IOSCO”), which has members from over 100 different countries. The Hong

Kong Securities and Futures Commission, the regulator of the market on which the constituent

securities trade, is also a member of IOSCO.28

A list identifying the current ordinary IOSCO

members is available at: http://www.iosco.org/about/?subsection=membership&memid=1.

Finally, the Exchange has entered into various comprehensive surveillance agreements (“CSAs”)

and/or Memoranda of Understanding with various stock exchanges, including the Stock

Exchange of Hong Kong. Given the capitalization of the FTSE China 50 Index and the deep

and liquid markets for the securities underlying the Index, the concerns for market manipulation

and/or disruption in the underlying markets are greatly reduced.

28

There are three categories of IOSCO members: ordinary, associate and affiliate. In

general, the ordinary members (124) are the national securities commissions in their

respective jurisdictions. Associate members (17) are usually agencies or branches of

government, other than the principal national securities regulator in their respective

jurisdictions that have some regulatory competence over securities markets, or

intergovernmental international organizations and other international standard-setting

bodies, such as the IMF and the World Bank, with a mission related to either the

development or the regulation of securities markets. Affiliate members (64) are self-

regulatory organizations, stock exchanges, financial market infrastructures, investor

protection funds and compensation funds, and other bodies with an appropriate interest in

securities regulation. See IOSCO Fact Sheet located at:

http://www.iosco.org/about/pdf/IOSCO-Fact-Sheet.pdf.

13

The Exchange notes that FTSE China 50 ETFs, such as the iShares China Large-Cap

ETF (FXI), are actively traded products. CBOE also lists options overlying those ETFs (FXI

options) and those options are actively traded as well.

CBOE has analyzed its capacity and represents that it believes the Exchange and the

Options Price Reporting Authority (“OPRA”) have the necessary systems capacity to handle the

additional traffic associated with the listing of new series that would result from the introduction

of China 50 options. Because the proposal is limited to one new class, the Exchange believes

that the additional traffic that would be generated from the introduction of China 50 options

would be manageable.

2. Statutory Basis

The Exchange believes the proposed rule change is consistent with the Securities

Exchange Act of 1934 (the “Act”) and the rules and regulations thereunder applicable to the

Exchange and, in particular, the requirements of Section 6(b) of the Act.29

Specifically, the

Exchange believes the proposed rule change is consistent with the Section 6(b)(5)30

requirements

that the rules of an exchange be designed to promote just and equitable principles of trade, to

prevent fraudulent and manipulative acts, to remove impediments to and to perfect the

mechanism for a free and open market and a national market system, and, in general, to protect

investors and the public interest.

The Exchange believes that the proposed rule change will further the Exchange’s goal of

introducing new and innovative products to the marketplace. Currently, the Exchange believes

that there is unmet market demand for exchange-listed options listed on this popular cash index.

29

15 U.S.C. 78f(b).

30 15 U.S.C. 78f(b)(5).

14

As described above, the iShares China Large-Cap ETF is an actively traded product, as are the

options on that ETF. E-Mini FTSE China 50 Index Futures are listed for trading on CME. As a

result, CBOE believes that China 50 options are designed to provide different and additional

opportunities for investors to hedge or speculate on the market risk on the FTSE China 50 Index

by listing an option directly on the FTSE China 50 Index.

The Exchanges believes that the FTSE China 50 Index is not easily susceptible to

manipulation. The index is a broad-based index and has high market capitalization. The FTSE

China 50 Index is comprised of 50 of the largest and most liquid Chinese stocks traded on the

SEHK and no single component comprises more than 15% of the index, making it not easily

subject to market manipulation.

Additionally, the iShares China Large-Cap ETF is an actively traded product, as are

options on that ETF. Because the index has 50 of the largest and most liquid Chinese stocks that

trade on the SEHK and trade a large volume with respect to ETFs and options on those ETFs, the

Exchange believes that the initial listing requirements are appropriate to trade options on the

index. In addition, similar to other broad-based indexes, the Exchange proposes to adopt various

maintenance criteria, which would require continual compliance and periodic compliance.

China 50 options would be subject to the same rules that currently govern other CBOE

index options, including sales practice rules31

, margin requirements32

and trading rules.33

The

Exchange would apply the same default position limits for broad-based index options to China

50 options. Specifically, the applicable position limits would be 25,000 contracts (standard

31

See Chapter IX (Doing Business with the Public).

32 See Chapter XII (Margins).

33 See e.g., Chapters IV (Business Conduct), VI (Doing Business on the Exchange Floor),

Chapter VIII (Market-Makers, Trading Crowds and Modified Trading Systems) and

Chapter XXIV (Index Options).

15

limit/on the same side of the market) and 15,000 contracts (near-term limit). The exercise limit

for China 50 options would be equivalent to the position limit for China 50 options. These same

position and exercise limits would apply to FLEX trading. All position limit hedge exemptions

would apply. The Exchange would apply existing index option margin requirements for the

purchase and sale of China 50 options.

The Exchange represents that it has an adequate surveillance program in place for China

50 options. The Exchange also represents that it has the necessary systems capacity to support

the new option series.

B. Self-Regulatory Organization’s Statement on Burden on Competition

CBOE does not believe that the proposed rule change will impose any burden on

competition not necessary or appropriate in furtherance of the purposes of the Act. Specifically,

CBOE believes that the introduction of new cash index options will enhance competition among

market participants and will provide a new type of options to compete with domestic products

such as FXI options, E-Mini FTSE China 50 Index Future and European-traded derivatives on

the FTSE China 50 Index to the benefit of investors and the marketplace.

C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule

Change Received from Members, Participants, or Others

No written comments were solicited or received with respect to the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action

Within 45 days of the date of publication of this notice in the Federal Register or within

such longer period up to 90 days (i) as the Commission may designate if it finds such longer period

to be appropriate and publishes its reasons for so finding or (ii) as to which the Exchange consents,

the Commission will:

A. by order approve or disapprove such proposed rule change, or

16

B. institute proceedings to determine whether the proposed rule change should be

disapproved.

IV. Solicitation of Comments

Interested persons are invited to submit written data, views, and arguments concerning

the foregoing, including whether the proposed rule change is consistent with the Act. Comments

may be submitted by any of the following methods:

Electronic comments:

Use the Commission’s Internet comment form

(http://www.sec.gov/rules/sro.shtml); or

Send an e-mail to rule-comments@sec.gov. Please include File Number SR-

CBOE-2015-099 on the subject line.

Paper comments:

Send paper comments in triplicate to Secretary, Securities and Exchange

Commission, 100 F Street, NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-CBOE-2015-099. This file number should be

included on the subject line if e-mail is used. To help the Commission process and review your

comments more efficiently, please use only one method. The Commission will post all

comments on the Commission’s Internet website (http://www.sec.gov/rules/sro.shtml). Copies

of the submission, all subsequent amendments, all written statements with respect to the

proposed rule change that are filed with the Commission, and all written communications

relating to the proposed rule change between the Commission and any person, other than those

that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be

available for website viewing and printing in the Commission’s Public Reference Room, 100 F

17

Street, NE, Washington, D.C. 20549 on official business days between the hours of 10:00 a.m.

and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the

principal office of the Exchange. All comments received will be posted without change; the

Commission does not edit personal identifying information from submissions. You should

submit only information that you wish to make available publicly. All submissions should refer

to File Number SR-CBOE-2015-099 and should be submitted on or before [insert date 21 days

from publication in the Federal Register].

For the Commission, by the Division of Trading and Markets, pursuant to delegated

authority.34

Brent J. Fields

Secretary

34

17 CFR 200.30-3(a)(12).

Page 37 of 43

EXHIBIT 3

FTSE China 50 Index (1/100th

) Options Contract Specifications

Trading Symbol:

FXTM

Settlement Value Symbol:

[Insert Settlement Value Symbol]

Description: The FTSE China 50 Index is a real-time tradable index comprising 50 of the largest and most

liquid Chinese stocks (H Shares, Red Chips and P Chips) listed and trading on the Stock

Exchange of Hong Kong (SEHK). The index is specifically designed for international

investors, combining the ease of trading on SEHK with a methodology to meet fund

regulatory requirements worldwide.

Multiplier:

$100.

Premium Quotation:

Stated in points, one point equals $100. Minimum tick for series trading below $3 is 0.05

($5.00); at or above $3 is 0.10 ($10.00).

Strike (Exercise) Prices:

In-, at- and out-of-the-money strike prices are initially listed. New strikes can be added as the

underlying trades through the highest and lowest strike price available.

Strike Price Interval:

Strike prices may be listed with a minimum interval of 2.5 points if the strike price is less than

200. When the strike price is 200 or above, strike price intervals will be no less than 5 points.

Expiration Months: Up to 12 near-term months. In addition, the Exchange may list up to 10 FXTM LEAPS

expiration months that expire from 12 to 60 months from date of issuance.

Expiration Date:

The third Friday of the expiration month.

Exercise Style:

European and A.M.-settled – FXTM options generally may be exercised only on the

Expiration Date.

Last Trading Day: Trading in expiring FXTM options will ordinarily cease on the business day (usually a

Thursday) preceding the day on which the exercise-settlement value is calculated.

Settlement of Option Exercise:

Page 38 of 43

Exercise will result in delivery of cash on the business day following expiration. The exercise

settlement value [Insert Settlement Value Symbol] is one-hundredth (1/100th) of the official

closing value of the FTSE China 50 Index – XINOI Index - as reported by FTSE on the last

trading day of the expiring contract. The exercise-settlement amount is equal to the difference

between the exercise-settlement value and the exercise price of the option, multiplied by

$100.

Position and Exercise Limits: The position limit is 25,000 contracts on the same side of the market, with no more than

15,000 contracts in the near term expiration month and the exercise limit is 15,000 contracts.

Customer Strategy -Based Margin:

Purchases of puts or calls with 9 months or less until expiration must be paid for in full.

Writers of uncovered puts or calls must deposit / maintain 100% of the option proceeds* plus

15% of the aggregate contract value (current index level x $100) minus the amount by which

the option is out-of-the-money, if any, subject to a minimum for calls of option proceeds*

plus 10% of the aggregate contract value and a minimum for puts of option proceeds* plus

10% of the aggregate exercise price amount. (*For calculating maintenance margin, use

option current market value instead of option proceeds.) Additional margin may be required

pursuant to Exchange Rules 12.3(h) and 12.10.

Customer Portfolio Margin:

FXTM options are eligible for a portfolio margin account. FXTM options are accommodated

in the China Indexes Product Group (81), with a 90% offset with the other classes contained

in that Product Group. The magnitude of the valuation point range under CBOE Rule 12.4

(Portfolio Margin) for FXTM options held in a portfolio margin account is -10%/+10%. The

current (spot or cash) FXTM index value will be used to calculate theoretical gains and losses

for FXTM options. Additional margin may be required pursuant to Exchange Rule 12.10.

CUSIP Number: [Insert CUSIP Number]

Trading Hours: 8:30 a.m. to 3:15 p.m. (Chicago time).

Page 39 of 43

EXHIBIT 5

(additions are underlined; deletions are [bracketed])

* * * * *

Chicago Board Options Exchange, Incorporated

Rules

* * * * *

Rule 24.1. Definitions

No changes.

…Interpretations and Policies:

.01 The reporting authorities designated by the Exchange in respect of each index underlying an

index option contract traded on the Exchange are as follows:

Index Reporting Authority

(Add the following to the current list:)

FTSE China 50 Index (1/100th

) .............................................................. FTSE International Limited

Rule 24.2. Designation of the Index

No changes.

…Interpretations and Policies:

.01 No changes.

.02 Initial and Maintenance Listing Criteria for FTSE China 50 Index (1/100th

) Options (China

50 options).

(a) The Exchange may trade China 50 options if each of the following conditions is satisfied:

(1) The index is broad-based, as defined in Rule 24.1(i)(1);

(2) Options on the index are designated as A.M.-settled index options;

(3) The index is capitalization-weighted, price-weighted, modified capitalization-weighted

or equal dollar-weighted;

(4) The index consists of 45 or more component securities;

Page 40 of 43

(5) Each of the component securities of the index will have a market capitalization of greater

than $100 million;

(6) No single component security accounts for more than fifteen percent (15%) of the weight of

the index, and the five highest weighted component securities in the index do not, in the

aggregate, account for more than fifty percent (50%) of the weight of the index;

(7) Non-U.S. component securities (stocks or ADRs) that are not subject to comprehensive

surveillance agreements do not, in the aggregate, represent more than twenty percent (20%) of

the weight of the FTSE China 50 Index;

(8) The Exchange may continue to trade China 50 options after trading in all component

securities has closed for the day and the index level is no longer widely disseminated at least

once every fifteen (15) seconds by one or more major market data vendors, provided that China

50 futures contracts are trading and prices for those contracts may be used as a proxy for the

current index value;

(9) The Exchange reasonably believes it has adequate system capacity to support the trading of

options on the index, based on a calculation of the Exchange’s current Independent System

Capacity Advisor (ISCA) allocation and the number of new messages per second expected to be

generated by options on such index; and

(10) The Exchange has written surveillance procedures in place with respect to surveillance of

trading of options on the index.

(b) The following maintenance listing standards shall apply to each class of index options

originally listed pursuant to paragraph .02(a).

(1) The conditions set forth in subparagraphs .02(a) (1), (2), (3), (4), (7), (8), (9) and (10) must

continue to be satisfied. The conditions set forth in subparagraphs .02(a)(5) and (6) must be

satisfied only as of the first day of January and July in each year;

(2) The total number of component securities in the index may not increase or decrease by more

than ten percent (10%) from the number of component securities in the index at the time of its

initial listing.

In the event a class of index options listed on the Exchange fails to satisfy the maintenance

listing standards set forth herein, the Exchange shall not open for trading any additional series of

options of that class unless the continued listing of that class of index options has been approved

by the Commission under Section 19(b)(2) of the Exchange Act.

* * * * *

Rule 24.9. Terms of Index Option Contracts

(a) General.

Page 41 of 43

(1) No changes.

(2) Expiration Months and Weeks. Index option contracts may expire at three-month intervals

or in consecutive months. The Exchange may list up to six expiration months at any one time,

but will not list index options that expire more than twelve months out. Notwithstanding the

preceding restriction, the Exchange may list up to twelve expiration months at any one time for

any broad-based security index option contracts, including reduced-value and jumbo option

contracts, (e.g., DJX, NDX, RUT, SPX and SPXpm) upon which the Exchange calculates a

volatility index and for CBOE S&P 500 AM/PM Basis, EAFE, [and] EM and China 50 options.

For VXST options, the Exchange may list up to 12 near-term VXST option expiration weeks.

(A) – (B) No changes.

(3) “European-Style Exercise”. The following European-style index options, some of which are

A.M.-settled as provided in paragraph (a)(4), are approved for trading on the Exchange:

(i)- (cviii) No changes.

[(cviv)] (cix) MSCI Emerging Markets Index (P.M.-settled)

(cx) FTSE China 50 Index (1/100th

)

(4) A.M.-Settled Index Options. The last day of trading for non-Volatility A.M.-settled index

options shall be the business day preceding the last day of trading in the underlying securities prior

to expiration. The last day of trading for Volatility Index, Individual Stock or ETF Based Volatility

Index options that measure a 30-day volatility period is governed by subparagraph (5) below and

the last day of trading for VXST options is governed by subparagraph (6) below. The current index

value at the expiration of an A.M.-settled index option shall be determined, for all purposes under

these Rules and the Rules of the Clearing Corporation, on the last day of trading in the underlying

securities prior to expiration, by reference to the reported level of such index as derived from the

opening prices (closing prices in the case of China 50 options) of the underlying securities on such

day, as determined by the market for such security selected by the Reporting Authority pursuant to

Interpretation and Policy .09 to Rule 24.9 , except that in the event that the primary market for an

underlying security does not open for trading, halts trading prematurely, or otherwise experiences a

disruption of normal trading on that day, or in the event that the primary market for an underlying

security is open for trading on that day, but that particular security does not open for trading, halts

trading prematurely, or otherwise experiences a disruption of normal trading on that day, the price

of that security shall be determined, for the purposes of calculating the current index value at

expiration, as set forth in Rule 24.7(e). The current index level at the expiration of an A.M.- settled

S&P 500 Dividend Index option shall be a special quotation of the S&P 500 Dividend Index as

determined by the Reporting Authority pursuant to Interpretation and Policy .09 to Rule 24.9 ,

except that in the event that the Reporting Authority is unable to calculate a special quotation of the

S&P 500 Dividend Index, the special quotation shall be determined, for the purposes of calculating

the current index value at expiration, as set forth in Rule 24.7(e).

Page 42 of 43

The following A.M.-settled index options are approved for trading on the Exchange:

(i) – (xcvi) No changes.

(xcvii) FTSE China 50 Index (1/100th

)

(5) – (6) No changes.

(b) Long-Term Index Option Series ( "LEAPS" ).

(1) No changes.

(2) Reduced-Value LEAPS

(A) Reduced-value LEAPS on the following stock indices are approved for trading on the

Exchange:

(i) – (lxxxv) No changes.

(lxxxvi) FTSE China 50 Index (1/100th)

(c) – (e) No changes.

…Interpretations and Policies:

.01 The procedures for adding and deleting strike prices for index options are provided in Rule

5.5 and Interpretations and Policies related thereto, as otherwise generally provided by Rule

24.9, and include the following:

(a) The interval between strike prices will be no less than $5.00; provided, that in the case of the

following classes of index options, the interval between strike prices will be no less than $2.50:

(i)- (lxxvi) No changes.

(lxxvii) FTSE China 50 Index (1/100th

), if the strike price is less than $200.00.

(b) – (m) No changes.

* * * * *

Rule 24A.7. Position Limits and Reporting Requirements

(a) FLEX Index Options

(1) In determining compliance with Rules 4.11, 24.4, 24.4A, 24.4B, and 24.4C FLEX Index

Options shall be subject to FLEX contract position limitations fixed by the Exchange in

Page 43 of 43

accordance with the provisions of this Rule.

(2) – (5) No changes.

(6) The position limits for FLEX Index options on the FTSE China 50 Index (1/100th

), MSCI

EAFE Index and [on the] MSCI Emerging Market Index are equal to the position limits for Non-

FLEX options on the FTSE China 50 Index (1/100th

), MSCI EAFE Index and [the] MSCI

Emerging Market Index.

(b) – (d) No changes.

* * * * *

Rule 24B.7. Position Limits and Reporting Requirements

(a) FLEX Index Options

(2) – (5) No changes.

(6) The position limits for FLEX Index options on the FTSE China 50 Index (1/100th

), MSCI

EAFE Index and [on the] MSCI Emerging Market Index are equal to the position limits for Non-

FLEX options on the FTSE China 50 Index (1/100th

), MSCI EAFE Index and [the] MSCI

Emerging Market Index.

(b) – (d) No changes.

* * * * *